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As Electric vehicles now start becoming mainstream and shaking up the entire supply chain. The Fluid/ lubricant market will not remain aloof to the change and the industry participants will have to develop new products to cater to this growing market segment.
Fluids made for high voltage hybrids and EVs should must have the right electrical properties and be compatible with insulating materials. Also, since BEVs have up to 4X copper content as compared to an ICE vehicle, an electric driveline fluid should also offer Copper corrosion protection.
At present, the application for EV fluids is limited to driveline and battery thermal management but in coming years, owing to increase in fast charging there will be dedicated coolants for power electronics and even charger cables. In power electronics, liquid cooled high power On-board chargers could be a standard fitment, replacing air-cooled, 3.3/3.7kW on-board chargers.
Electric Vehicles present a new set of challenges to their ICE counterparts. EVs need a fluid that can cool and lubricate the motor, and also protect the on-board electronics and be compatible with non-metal materials like plastics. Therefore, developing specialized high-performance lubricants for BEVs could result in high margin sales.
China’s monthly electric vehicle sales and production volume have decreased for three consecutive months by the end of July. For the first seven months of this year, China produced a total of 14.44 million vehicles, up 17% Y-o-Y.
However, Jan-July 2021 sales grew by ~19% versus the same period of last year to 14.756 million vehicles. Compared with the same period of 2019, sales and production of the first seven months were up 4.2% and 3.4% respectively.
NEVs contributed 31.5% of the country’s monthly export volume which soared 180% to 174,000 vehicles in July 2021. The export volume of the first seven months surpassed 1 million, 770,000 of which were passenger vehicles.
Decline in China EV market will have a direct impact on the global Electric Vehicle Fluids Market.
United States is the 3rd largest EV producer behind China and Europe. Just seven of the 44 major US vehicle assembly plants are slated to be making all EVs by 2025. The US market has remained steadily behind with fewer than 360,000 EV sales annually from 2018 through 2020.
Of the seven US EV-only assembly plants, representing about 16% of US vehicle production and capacity, 3 are owned by General Motors, 2 by Tesla, and 1 each by emerging EV companies Rivian and Lucid Motors.
Five automakers (Ford, Fiat Chrysler, Toyota, Honda, and Nissan) that each produce about 900,000 to 1.5 million vehicles annually in the US have not announced plans for EV-only assembly plants.
The number of electric vehicles sold was 6.5 million units in 2021. Approximately 5.49 million EVs were sold in both China and Europe in 2021, eight times the EV sales in the US. In 2021, a total of 2.27 M passenger electric cars were registered in Europe (up 66% Y-o-Y).
The market size of EV fluids will be closely related with growing sales volume of new EVs, especially BEVs and the number of high voltage components. Unlike the fluids used in ICE vehicles, where they need to be periodically replaced, the EV fluids will have a longer lifespan and will only need to be replaced once or at max twice in a vehicle`s lifetime.
The Electric vehicle fluid market is estimated at $XXM in 2022 and growing at –%CAGR till 2030.
The growth in the global fluids market for electric vehicles is attributable to the rising demand for efficient and durable fluids for electric vehicles. Generally, various components of an electric vehicle generate a lot of heat during the operation of the vehicle, such as the battery system and the e-motors.
This has further led to the need for better thermal management in these vehicles. The new EV fluids have added additives and dielectric properties which makes them suitable for application in electric vehicle components.
According to SK Innovation, a Korean energy chemical company, the global electric vehicle lubricant market is expected to grow from 12 million liters in 2021 to XX million liters in 2030 which would be driven by booming registrations of new autos.
The world has gone through a phase of unprecedented health crisis, economic, social, and political instability triggered by the COVID-19 (C-19), the global community is busy digesting a plethora of views on the immediate impact of C-19 on every type of sector.
As the global vehicle market gets restructured around EVs, the market for lubricants for EVs emerges as the new blue ocean. With improved performances of EVs, the use of exclusive lubricant products for these cars is an essential practice.
As EV lubricants play essential roles in power trains in boosting performance and driving experience. Products include greases, brake fluids, heat transfer fluids and drive system fluids, all of them classed as e-fluids.
Compared with conventional internal combustion engine lubricants, e-fluids cool e-motors and gears and provide insulation to electric current. Also, they extend the lifetime of each electric motor part, and extend the mileage of EVs by improving machine efficiency.
Before the crisis, the EV market was booming—driven by sales in China, first and foremost—but also in other developed countries in Europe and North America. In the early stages of expansion, EVs have been heavily promoted by strong governmental intervention, leading to regulatory frameworks imposing stringent emission reduction levels, coupled with generous financial support and incentives.
Electric vehicles market worldwide excluding China and Europe had experienced a shift as consumers preferred affordable products amid COVID-19, which made manufacturers resume production for conventional vehicles.
The potential shift in consumer preferences affected manufacturers’ investment and production decisions. Ultimately, resuming production levels for conventional vehicles and EVs got dependent on demand revival, supply-chain reactivation and access to the labour force.
In India there were delays in electric vehicles (EV) production as manufacturers were focused on reviving demand and producing BS-VI vehicles, while curbs on imports of Chinese components had led to disruptions in EV manufacturing. Lower disposable incomes and a tendency towards cash saving had reduced demand for EV in the short term.
According to market research firm Kline & Co., demand for electric vehicle fluids is expected to climb by double digits as the United States overtakes China and the European Union as the largest market for battery-powered commercial vehicles.
For greases, driveline fluids, and heavy-duty engine oils used in hybrids and plug-in hybrids, Kline anticipates significant development.
While growth at that rate is significant, a project manager for Kline headquartered in Prague noted that the market is modest when compared to finished lubricants as a whole.
He noted in a webinar regarding the demand for commercial electric car lubrication that “obviously, it’s expanding tremendously since it’s coming from a very modest basis. “Commercial vehicle thermal management fluids are anticipated to expand more slowly.
According to Luzuriaga, this is largely because long-distance commercial cars have efficient air and indirect conditioning systems. More active rules and policies addressing the commercial vehicle industry in both the United States and Europe, according to Luzuriaga, are to blame for the United States’ leapfrogging.
In the United States, several states, like California, have set sales goals for commercial vehicles and commercial trucks of between 50 and 60 percent electric vehicles. Around 40,000 tonnes of commercial vehicle EV fluids are already in demand, and according to Kline, by 2020, that figure will surpass 500,000 tonnes.
The Electric Vehicle fluids market at present is dominated by European and American companies. Almost all major oil companies have recently launched their new products for the growing EV market.
As we have detailed in our EV DC Fast Charger report that oil companies around the world are investing in electric vehicle charging solutions as they see a significant revenue potential in developing fast charging networks.
The year 2019 and especially in past 10 months or so ,the lubricant industry has witnessed multiple new product launches by many lubricant manufacturers and in coming years we expect all major oil and lubricant manufacturers to enter this market.
In May 2019, Shell launched new range of fluids, specifically designed and taregted at Battery electric vehicles. As of YTD -Sep 2019 almost 75-77% of EVs sold globally are BEVs,up from 71% in 2018, so that`s a very smart move by Shell.
Also in May 2019, Total launched a new range of fluids for BEV and hybrid vehicles.
In Sep 2019, ExxonMobil launched a new lineup called Mobil EV Therm and EV Drive, while Valvoline is now selling EV Drive System lubricants.
Repsol has posted net income of €1.235 billion for the first half of 2021, a period in which the company has advanced towards the decarbonization objectives laid out in its Strategic Plan, supported by an efficiency-oriented management of the company.
Shell delivered strong financial results in the first quarter of 2021. The Adjusted Earnings increased to $5.5 billion, from $3.2 billion in Q1.
Hyundai Motor Company signs a new five-year Global Business Cooperation Agreement with Royal Dutch Shell plc. The new agreement finds Hyundai looking to increase eco-friendly production and continue its transformation as a Smart Mobility Solution Provider. Shell will also expand its role in providing Hyundai with cleaner mobility solutions.
Sk Innovation’s products have been used in more than 700,000 EVs, while EV lubricant sales have increased by an average of 33% annually over the past two years. It expects to double sales in 2021 over last year’s figures.
Valvoline Inc., a global leader in vehicle care powering the future of mobility through innovative services and products, has begun piloting electric vehicle (EV) services in its US retail stores. They have been piloting in a limited number of locations, and are the next step in advancing Valvoline’s strategy to extend its world-class preventive auto maintenance service model to EV owners, OEMs and fleets.
